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| Privatisation of Green Investment Bank could 'damage its reputation' | Privatisation of Green Investment Bank could 'damage its reputation' |
| (about 7 hours later) | |
| The UK's "green" bank should not be privatised unless the government can ensure it keeps its environmental purposes, a committee of MPs has said. | The UK's "green" bank should not be privatised unless the government can ensure it keeps its environmental purposes, a committee of MPs has said. |
| Plans to part-privatise Green Investment Bank (GIB) were announced by Business Secretary Sajid Javid in June. | |
| But the House of Commons' Environmental Audit Committee warned this could cause the bank to lose its "green identity". | |
| This could "damage its reputation" and "undermine its leadership role in the green economy", the committee said. | This could "damage its reputation" and "undermine its leadership role in the green economy", the committee said. |
| The Edinburgh-based GIB - thought to be the first of its kind - has invested £2.3bn of public money in 60 projects, with a total value of more than £10bn, since it was launched in 2012. | The Edinburgh-based GIB - thought to be the first of its kind - has invested £2.3bn of public money in 60 projects, with a total value of more than £10bn, since it was launched in 2012. |
| However, there are restrictions on its borrowing and Mr Javid hopes that full access to the capital markets will increase its lending powers. | However, there are restrictions on its borrowing and Mr Javid hopes that full access to the capital markets will increase its lending powers. |
| Decision 'appears rushed' | Decision 'appears rushed' |
| The bank's projects are required to make a contribution to one of the its five "green purposes": reducing greenhouse gas emissions, increasing the efficiency of the use of natural products, protecting the natural environment or biodiversity and promoting environmental sustainability. | The bank's projects are required to make a contribution to one of the its five "green purposes": reducing greenhouse gas emissions, increasing the efficiency of the use of natural products, protecting the natural environment or biodiversity and promoting environmental sustainability. |
| But the projects are also required to provide market-based commercial returns. | But the projects are also required to provide market-based commercial returns. |
| Mr Javid has argued the privatisation would give the bank greater access to capital by removing restrictions on its borrowing and freeing it from EU state aid rules. | Mr Javid has argued the privatisation would give the bank greater access to capital by removing restrictions on its borrowing and freeing it from EU state aid rules. |
| But in its report, the Environmental Audit Committee argued privatisation could encourage the bank to shift its focus towards more conventional projects and away from more complex schemes which struggle to raise funding elsewhere. | But in its report, the Environmental Audit Committee argued privatisation could encourage the bank to shift its focus towards more conventional projects and away from more complex schemes which struggle to raise funding elsewhere. |
| It said if the government could not guarantee the bank's green purposes it should not be privatised. | It said if the government could not guarantee the bank's green purposes it should not be privatised. |
| Committee chairman Huw Irranca-Davies said: "The Green Investment Bank has done a great job of getting capital flowing to the kind of innovative green projects that sometimes struggle to secure financial backing. | Committee chairman Huw Irranca-Davies said: "The Green Investment Bank has done a great job of getting capital flowing to the kind of innovative green projects that sometimes struggle to secure financial backing. |
| "The decision to privatise the bank appears rushed and ministers have not produced convincing evidence that it will achieve its aims better in the private sector." | "The decision to privatise the bank appears rushed and ministers have not produced convincing evidence that it will achieve its aims better in the private sector." |
| The committee said the government's proposed protections of the bank's green purposes after privatisation were "not robust enough", as ministers were relying on assurances from potential shareholders. | The committee said the government's proposed protections of the bank's green purposes after privatisation were "not robust enough", as ministers were relying on assurances from potential shareholders. |
| It also recommended that the government should retain a minority stake in the bank if it is sold and should establish a "special share" to enable it to protect its green purposes. | It also recommended that the government should retain a minority stake in the bank if it is sold and should establish a "special share" to enable it to protect its green purposes. |
| But it also urged ministers to produce a business case and assessments of the likely impact of the sale, along with an evaluation of the benefits of alternative options. | But it also urged ministers to produce a business case and assessments of the likely impact of the sale, along with an evaluation of the benefits of alternative options. |
| Mr Irranca-Davies added: "We need a Green Investment Bank that has the freedom to operate in ways that conventional commercial banks cannot. | Mr Irranca-Davies added: "We need a Green Investment Bank that has the freedom to operate in ways that conventional commercial banks cannot. |
| "The green purposes of GIB must not only be properly protected - they should be strengthened." | "The green purposes of GIB must not only be properly protected - they should be strengthened." |